Many farmers are getting addicted to rice pledging, as the scheme pays them faster than the previous programme of rice income guarantee, according to a poll by the University of the Thai Chamber of Commerce.
Thanavath Phonvichai, UTCC's vice-president for research, said most of those surveyed favoured the rice pledging scheme at 15,000 baht per tonne, citing as the main reason its faster pay-out that enables them to more quickly buy consumer products and necessities.
Some 1,200 farmers responded from July 10-15 about the comparative benefits between the incumbent government's pledging scheme and the rice income guarantee programme. Dr Thanavath said a third of respondents were addicted to rice pledging, saying the government should continue running the programme.
Rice pledging was estimated to cost the government 282 billion baht as of Wednesday.
Beginning last October, the programme for the 2011-12 rice season pledged 6.95 million tonnes of paddy from 1.29 million farm households at a cost of 122 billion baht. The second crop followed with 11.1 million tonnes of paddy for 160 billion baht.
Given massive budget outlays, Dr Thanavath said the government has yet to provide a clear answer on whether the scheme is worth the funding and how it benefits the economy, as many farmers remain poor. He urged better food safety and food security standards, and figuring out ways to improve competitiveness for all stakeholders in the industry.
"The government should assign central state units such as the National Statistical Office, the Finance Ministry and various universities to conduct a study on whether the entire rice industry receives sustainable benefits from the programme," said Dr Thanavath. "A lot of questions remain unanswered about whether this project truly helps improve farmers' income or upgrades their quality of lives in a sustainable manner."
He added public debt risks increasing to 50-60% of the gross domestic product if pledging continues, which is estimated to cost the government losses of up to 100 billion baht apart from corruption.
The poll found despite the scheme, farm household debt increased by 11% to 114,378 baht per family last year. Most believe their debts will be erased if the scheme continues for another three years.
About the author
- Writer: Phusadee Arunmas
Position: Business Reporter